Budget Watch: (2) Temporary housing, council budgets and tackling the LHA Gap
High on the Budget watch list is the cost of temporary housing for homeless people. This is something that the Housing & Finance Institute have been working on for some time – with its 'Operation Homemaker' programme, which sets out ways to prioritise and convert allocations of spending and investment to secure an immediate boost in the provision of additional social and affordable housing which would ease pressures on revenue spending and housing benefit and ensure more people in need had a secure and appropriate home. Read more here about the HFI and the Operation Homemaker plan.
Tackling homelessness and temporary accommodation is a major priority for the new Government – to address the financial pressures on councils and ensure that there is appropriate housing for those most in need of it.
In July the Local Government Association assessed that councils were spending more than £1.75Billion on supporting over 110,000 households with temporary accommodation. Financial pressures from temporary accommodation are overwhelming some local council's budgets. More immediate revenue relief for council spending on temporary accommodation is desperately needed – look out for additional council support in this area in the Budget.
In addition, there have been longstanding calls to tackle the effect of the gap between the allowable welfare housing allowance (the LHA) and the true cost of housing. This can create a poverty gap for welfare recipients, with calls for reform including from the Joseph Rowntree Foundation (JRF). Proposals include higher housing allowance payments, localised rent controls or adjustments to the operation of the welfare deductions system. In the Budget there may be an indication given as to whether LHA levels may be considered as part of the upcoming spending review process. Also, whether devolved powers may be allowed so that different approaches to tackle this issue may be tested, including the possibility of local rent controls.
